The comprehensive revitalization of the dairy industry has both the foundation and the conditions
On August 26, the China Dairy Top 20 Summit and Dairy Industry Revitalization Conference was held in Shijiazhuang, Hebei. What supports the revitalization of the dairy industry? How will the dairy industry enhance its competitiveness in the future? During the conference, Han Changfu, Minister of Agriculture, accepted an exclusive interview with an Economic Daily reporter.
Reporter: Why do we say there is no reason for us to give up the national dairy industry?
Han Changfu: The level of milk consumption is an important indicator of a country's national living standards. A moderately prosperous society cannot be without milk, and more than a billion Chinese people cannot be without their own national dairy industry. We are advancing toward realizing the first centenary goal, and it is hard to imagine that while building a moderately prosperous society in all respects, some people still cannot drink milk. Since entering the new century, with the rapid advancement of urbanization and the continuous improvement of people's living standards, both the number of milk consumers and per capita consumption have risen substantially. However, China's per capita dairy consumption is only one-third of the world average and one-half of Asia's, and rural residents, who account for half of the country's population, still rarely or never drink milk. This is a weak link in China's dairy industry.
A weak link is also potential. We are still a developing country, with more than 1 million dairy farmers, more than 10 million dairy cows, several hundred dairy enterprises, and an ever-expanding large market of more than a billion people. We have no reason to give up the national dairy industry. For the sake of the happy life of our people, for the sake of farmers' employment and income growth, and for the sake of safeguarding the supply of important agricultural products and food for the country, we must accelerate the revitalization of the national dairy industry and make unremitting efforts so that all Chinese people can drink milk and drink high-quality milk.
Reporter: As a major dairy country, what foundations does China's dairy industry have for revitalization?
Han Changfu: In recent years, the quality of China's dairy industry has improved significantly, and comprehensive revitalization has the foundation and the conditions. We must be full of confidence in the revitalization of the dairy industry. China has vigorously carried out rectification and revitalization of the dairy industry, with vigorous efforts in quality supervision, technological progress, production development, and brand building. The development of the dairy industry can be said to be far beyond what it was in the past. First, comprehensive production capacity has steadily improved. In 2015, China's output of raw milk and dairy products ranked third in the world; per capita dairy consumption reached 36 kg, an increase of 28.4 kg over 2000. Second, the level of quality and safety has improved substantially. In 2015, the pass rates of spot checks for raw milk and dairy products nationwide reached 99.3% and 99.5% respectively, and indicators such as milk protein and milk fat in large-scale pastures reached the level of developed countries. Third, the mode of dairy production has changed markedly. The proportion of large-scale dairy farming exceeded 48%, and all large-scale farms achieved mechanized milking; there were more than 15,000 specialized dairy farmer cooperative organizations, and the level of standardization and organization improved significantly. In addition, the level of major dairy processing equipment and technology has approached or reached the world's advanced level, and the market share of the top 20 dairy enterprises has exceeded 50%.
Of course, China's dairy industry still has problems such as a low degree of standardization, relatively high production costs, a disconnect between farming and processing, a lack of a stable mechanism for linking interests, and a lack of competitive corporate brands. In particular, affected by the impact of imports, it faces prominent problems such as low milk prices, difficulty in sales, reduced income for dairy farmers, and rising enterprise inventories. But the difficulties are temporary. We have world-class processing enterprises, the world's largest potential consumer market, and strong support from the state. These are favorable conditions for the development of China's dairy industry.
Reporter: In the face of international competition, how can China's dairy industry strengthen its internal strengths?
Han Changfu: Accelerating the supply-side structural reform, enhancing the competitiveness of China's dairy industry, and fighting the battle for dairy industry revitalization are important and urgent tasks. Focusing on improving quality and efficiency, we must vigorously advance the scaling-up, organization, standardization, and branding of the dairy industry, and strive to join the ranks of the world's dairy powers as a whole by 2025. We will focus our efforts on the following areas.
Relying on building high-quality milk source bases, “plant good grass, raise good cows, produce good milk.” We will strive to achieve “improved breeds of dairy livestock, high-quality forage grass, and standardized production” and promote cost reduction, quality improvement, and efficiency enhancement in the dairy industry. Each year, 500,000 mu of high-yield and high-quality alfalfa bases will be newly built, and pilots for “grain-to-feed” conversion will be carried out in 100 counties; we will continue to carry out demonstration creation for standardized dairy cow farming, and support the upgrading and transformation of 900 to 1,000 large-scale farms each year. We will strive to have more than 3 million high-yield dairy cows producing over 8 tons by 2020, with the proportion of large-scale farming exceeding 70%.
Focusing on improving the modern dairy industry quality supervision system, “strict production, strong supervision, and brand creation.” We must improve dairy cow farming standards and norms, perfect the standardized production system for dairy products, strengthen production process control, and continuously raise the level of “producing” quality. We will implement a dairy product quality and safety testing plan, improve the whole-process quality and safety traceability system, and build a rigorous quality and safety supervision system across the entire industry chain.
Taking the advancement of integration of farming and processing as the starting point, achieve win-win cooperation between dairy farmers and dairy enterprises. The dairy industry covers multiple links including forage and feed cultivation, dairy cow farming, and dairy processing. To promote the healthy development of the dairy industry, dairy farmers must be treated well. We must establish a stable interest-linking mechanism between dairy farmers and dairy enterprises, so that all links upstream and downstream in the production chain are organically integrated. Dairy farmers must grow stronger, raise their degree of organization, and enhance their ability to cope with market risks; enterprises must invest, build, acquire, take equity stakes in, or entrust the management of farms, and increase the proportion of self-owned milk sources; the government must provide support and urge all parties to stabilize production and sales relations.
With the layout of coordinating the use of both markets and both types of resources, comprehensively enhance the international competitiveness of the dairy industry. China's dairy industry is already highly open to the outside world. With the in-depth advancement of the “Belt and Road” construction, it will become integrated into the international market to a greater extent in the future. On the one hand, we should moderately import dairy products to adjust surpluses and shortages and meet the diversified needs of domestic consumers; on the other hand, we should encourage enterprises to accelerate overseas layout, actively utilize overseas resources, and open up international markets.